Professional Documents
Culture Documents
Direct Materials
Direct Labor
Factory Overhead
Non manufacturing cost
a)
b)
c)
d)
e)
f)
g)
h)
Salesman commissions
Factory Rent
Depreciation expense - factory
Frosting
Bakers wages
Depreciation expense office
Cake mix
Sprinkles for decoration (indirect material)
Answer
Non manufacturing cost
Factory Overhead
Factory Overhead
Direct Materials
Direct Labor
Non manufacturing cost
Direct Materials
Factory Overhead
2. The following is a list of various costs of producing sweatshirts. Classify each cost as either a
variable, fixed, or mixed cost for units produced and sold.
(a) Lubricants used to oil machinery. V
(b) Warehouse rent of $6,000 per month plus $.50 per square foot of
storage used.M
(c) Thread.V
(d) Electricity costs of $.025 per kilowatt-hour.V
(e) Janitorial costs of $2,000 per month.V
(f) Advertising costs of $10,000 per month.F
(g) Sales salaries.F
(h) Color dyes for producing different colors of sweatshirts.V
(i) Salary of the production supervisor.V
(j) Straight-line depreciation on sewing machines.F
(k) Patterns for different designs. Patterns typically last many years
before being replaced.F
(l) Hourly wages of sewing machine operators.V
(m) Property taxes on factory, building, and equipment.F
(n) Cotton and polyester cloth.V
(o) Maintenance costs with sewing machine company. The cost is
$2,000 per year plus $.001 for each machine hour of use.M
52,600
101,200
143,400
10,000
72,100
51,700
3,500
1,500
2,100
16,000
4,000
Prime Costs
Manufacturing Overhead
Conversion Costs
Product Costs
Period Costs